Tuesday, October 5, 2010

BP (NYSE:BP) Compensation Fund Slowed by Fraud

The BP (NYSE:BP) compensation fund, which the claimant portion is administered by Kenneth Feinberg, has been demonized because of the alleged slow payments and amounts being handed out.

As the story emerges though, the frustration, while in many cases is legitimate, has been worsened by many who are attempting to game the system by getting paid much more than actual damages, and in many cases, some who don't qualify for damages at all.

That more than anything has been the reason for the slow process, and because there are legitimate claims suffering as a result, makes it hard for Feinberg to defend, because it gives the appearance of not paying out what is owed for legitimate claims.

Major problems in getting the fund to move faster, as mentioned, are outright fraud, requests for money far beyond damages, and absolutely no proof of suffering losses at all.

What would probably stem a lot of this is for the Justice Department or law enforcement to step in and arrest and charge some of those commiting the fraud in order to get the process moving forward.

There are some legitimate complaints related to the fund, but most of them come from those trying to get money they don't deserve, and worse, clogging up the system because of the time it takes to confirm one way or the other if they qualify.

The enormity of the fraud has caused Feinberg and his team to have to check closely in order to make determinations. That's a good thing in the sense of having enough money to pay for legitimate claims.

If Feinberg were to allow the outrageous claims to go forward, it would result in BP paying out damages to those who weren't harmed by the consequences of the oil spill, and also cause them to pay far more than they would have had to.

Someone needs to step in and let those making fraudulent claims know they are being watched and could go to jail for what amounts to theft.